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Original Medicare pays for medical care. It does not pay for what you pick off a shelf: the pain relievers, the bandages, the toothpaste, the reading glasses. An over-the-counter allowance exists only inside Medicare Advantage, where insurers use part of their rebate money to fund a prepaid card you can spend on approved items.
It is one of the benefits most heavily advertised and least well understood, and it is quietly shrinking. Two things are worth knowing before you choose a plan on the strength of it: how much smaller the benefit has gotten, and the letter your plan is now obliged to send you halfway through the year.
Fewer Plans Offered It in 2026 Than in 2025
For 2026, 66% of individual Medicare Advantage plans offer an over-the-counter allowance, down from 73% in 2025. That is not an isolated trim. Meal benefits fell from 65% of plans to 57%, and transportation for medical appointments from 30% to 24%.
Dental, vision and hearing are the exception and remain close to universal, at 98%, 99% and 98% of individual plans. The benefits being cut are the discretionary, cash-like ones — which is what you would expect from insurers managing a tighter year, and a reason not to pick a plan on a perk that may not survive the next annual notice of change.
Special needs plans are a different market. SNPs offer an over-the-counter allowance in 94% of cases, against 66% for ordinary plans, and the gap widens further on everything else: 67% offer medical transportation against 24%, and 85% offer a food or produce benefit against 11%.
| Share of plans offering it in 2026 | Individual plans | Special needs plans |
|---|---|---|
| Over-the-counter allowance | 66% | 94% |
| Meal benefit | 57% | 66% |
| Transportation for medical needs | 24% | 67% |
| Food and produce | 11% | 85% |
| Transportation for non-medical needs | 5% | 37% |
What the 2027 Plan Filings Show
The figures above are KFF’s for 2026. To see what happens next, we went to the source: the benefit filings every plan submits to CMS, published as the PBP Benefits files. We counted the 2026 and 2027 files the same way, looking at plans open to anyone and leaving out employer plans. Our 2026 count gives 66.5% of ordinary plans with an allowance, which matches KFF’s 66%, so the two years compare apples to apples.
| Plans with an OTC allowance | 2026 | 2027 | Typical amount per year, 2027 |
|---|---|---|---|
| Ordinary plans | 2,497 of 3,754 (66.5%) | 2,071 of 3,553 (58.3%) | $200 |
| Dual eligible SNPs (Medicare + Medicaid) | 1,049 of 1,085 (96.7%) | 1,017 of 1,052 (96.7%) | $900 |
| Chronic condition SNPs | 513 of 562 (91.3%) | 702 of 754 (93.1%) | $336 |
| All special needs plans | 1,695 of 1,803 (94.0%) | 1,864 of 1,969 (94.7%) | $540 |
Our own count from the CMS PBP Benefits files for 2026 and 2027. “Typical” is the median of plans that file a dollar maximum, turned into a yearly figure.
The cut is concentrated in ordinary plans, where about four in ten now offer no allowance at all. Special needs plans held steady, and dual eligible plans pay several times more: half of them offer between $300 and $1,944 a year, and 112 of the 495 that file an amount let the balance roll over, something almost no ordinary plan does.
Which insurers cut it
| Ordinary plans with an allowance | 2026 | 2027 |
|---|---|---|
| Humana | 53% (334 of 633) | 39% (234 of 600) |
| UnitedHealthcare | 62% (316 of 512) | 54% (257 of 480) |
| Aetna Medicare | 59% (287 of 483) | 61% (285 of 464) |
| Devoted Health | 71% (171 of 241) | 73% (298 of 407) |
| Kaiser Permanente | 71% (64 of 90) | 74% (64 of 87) |
| SCAN Health Plan | 98% (44 of 45) | 94% (49 of 52) |
Humana, which sells more ordinary plans than anyone, made one of the deepest cuts: only 39% of its 2027 plans include an allowance. Aetna, Devoted and Kaiser kept theirs at about the same level. If your current plan is from one of the insurers that cut, check your Annual Notice of Change before assuming the card is still there in January.
The other cash-like extras fell further
The same filings show the benefits that sit next to the card. Our 2026 count reproduces KFF’s figures exactly (57% for meals, 24% for medical transportation, 11% for food and produce, 5% for non-medical transportation), and 2027 continues the slide.
| Share of plans offering it | Ordinary 2026 | Ordinary 2027 | SNPs 2026 | SNPs 2027 |
|---|---|---|---|---|
| Over-the-counter allowance | 66.5% | 58.3% | 94.0% | 94.7% |
| Meal benefit (after a hospital stay, for example) | 56.9% | 45.0% | 66.3% | 55.1% |
| Transportation to medical appointments | 24.2% | 19.0% | 67.6% | 57.9% |
| Food and produce | 11.1% | 10.0% | 85.1% | 84.7% |
| Transportation for non-medical needs | 4.8% | 5.3% | 36.9% | 34.8% |
| Pest control | 3.2% | 3.4% | 23.0% | 20.1% |
Our own count from the CMS PBP Benefits files: 3,754 ordinary plans and 1,803 SNPs in 2026; 3,553 and 1,969 in 2027.
The meal benefit lost the most ground: fewer than half of ordinary plans offer it for 2027, down from well over half. Medical transportation dropped by about a fifth in both ordinary and special needs plans. The food and produce benefit barely moved because it was already rare outside special needs plans, where it is offered under the chronically-ill rules covered further down. If a plan’s advertising leans on these extras, the 2027 numbers are a good reason to read its Evidence of Coverage line by line.
How the Allowance Actually Works
Your plan loads a fixed sum onto a prepaid card, monthly, quarterly or once a year depending on the plan. You spend it from an approved catalog — typically hundreds of items covering pain relief, vitamins, first aid, dental and eye care and cold remedies — either at participating retailers or, on some plans, only through a mail-order catalog delivered to your door.
Three details decide whether the benefit is worth anything to you in practice. The first is the refresh schedule, because almost every plan operates on a use-it-or-lose-it basis: whatever is left when the period ends is gone, not carried forward. The second is the catalog itself, which varies by carrier and is narrower than people assume. The third is where the card is accepted, which on some plans is a short list of chains.
Because every plan files the details of its allowance with CMS, we can say what those three details look like across the whole market for 2027. Among the 1,396 ordinary plans that file a dollar maximum:
- The typical card is worth about $200 a year. Half of plans sit between $120 and $340. 167 plans offer less than $100 a year, and only 13 offer $1,200 or more.
- Nine in ten refresh every three months. 1,278 plans (91.5%) load the card quarterly and 103 monthly, so a “$200 benefit” usually means $50 you have to spend before the end of each quarter.
- Almost nothing rolls over. Only 27 of the 1,396 plans (1.9%) let an unused balance carry forward to the next period.
- How you spend it varies. Of the 2,071 ordinary plans with an allowance, 65.6% offer a mail-order catalog, 65.6% a debit card, and 15.2% pay you back against receipts; many offer more than one route.
- Two items are nearly always included. 89.6% of these plans list naloxone, the opioid overdose reversal spray, and 91.8% list nicotine replacement products.
One caution about those amounts. A third of ordinary plans with an allowance (675 of 2,071) don’t file a dollar maximum in that part of their filing at all, including every plan from Humana and UnitedHealthcare, so they are not in the figures above. For those plans the amount appears only in the plan’s own documents. Whatever plan you are looking at, the figure that applies to you is the one in its Evidence of Coverage or member portal.
The Letter Your Plan Must Send You in July
This is the part almost nobody knows, and it is the most useful thing in this article.
CMS now requires every Medicare Advantage plan to send each member a Mid-Year Enrollee Notification of Unused Supplemental Benefits. It has to be personalized to you, list every supplemental benefit you have not used in the first six months of the year, and for each one give the scope of the benefit, what it costs you, how to access it, any network information, and a customer service number. It must arrive between June 30 and July 31.
The rule exists because these benefits go unclaimed on a large scale. If you have an over-the-counter allowance you have never touched, that letter is the plan telling you so in writing. It is worth opening, and it arrives at a useful moment: early enough to spend the balance, and a few months before the Annual Enrollment Period, when you decide whether a plan sold partly on these benefits deserves another year.
Where Food, Utilities and Flex Cards Fit In
Standard over-the-counter money buys health items. The cards that also cover groceries or a utility bill are usually a different benefit sitting on the same piece of plastic: Special Supplemental Benefits for the Chronically Ill, or SSBCI. These may be offered only to enrollees with qualifying chronic conditions, which is why two people on the same plan can have cards that do different things.
CMS has tightened this category, and in a direction worth understanding. Plans must now demonstrate with research, by the time they submit their bids, that an SSBCI item meets the legal threshold of having a reasonable expectation of improving the health or overall function of chronically ill enrollees, and maintain bibliographies of the studies supporting it. A benefit can no longer be added simply because it sells.
The 2026 rule goes further and codifies a list of things that may not be offered as SSBCI at all, naming non-healthy food, alcohol, tobacco and life insurance. If you have seen a flex card advertised as spendable on more or less anything, that is the practice CMS is closing down.
How to Judge the Benefit When Comparing Plans
Treat the allowance as a tiebreaker, never as a reason. A card worth a few hundred dollars a year is real money, but it is small against the numbers that decide a bad year: the plan’s out-of-pocket maximum, whether your doctors are in network, and whether your prescriptions are on the formulary. A plan that wins on the card and loses on the formulary is not a bargain.
When you do compare, check four things in the Evidence of Coverage rather than in the advertising: the amount, the refresh period, the catalog, and where the card is accepted. Then mark the refresh dates on your calendar, because unused money is simply lost.
Frequently Asked Questions
Does Original Medicare include an over-the-counter benefit? No. It exists only as a supplemental benefit inside certain Medicare Advantage plans, funded by the plan rather than by Medicare.
Do all Medicare Advantage plans offer it? No, and fewer do each year. In our count of the 2027 plan filings, 2,071 of the 3,553 ordinary plans include one (58.3%), down from 66.5% in 2026, against 94.7% of special needs plans. Confirm it for the specific plan you are looking at, in the year you are looking at it.
Does an unused balance roll over? Almost never. Of the 1,396 ordinary plans for 2027 that file a dollar amount, only 27 say the unused balance carries forward to the next period. Every other plan resets the allowance and the remainder is lost.
How much is a typical allowance worth? For an ordinary plan in 2027, the middle figure is $200 a year, usually paid as $50 a quarter, and half of plans sit between $120 and $340. Plans for people with both Medicare and Medicaid (D-SNPs) are in a different league, with a middle figure of $900 a year.
Can I buy groceries with the card? Only if your plan includes a food benefit, which is usually a separate SSBCI benefit limited to enrollees with qualifying chronic conditions. Only 11% of individual plans offer a food and produce benefit at all, against 85% of special needs plans.
How do I find out what I have left? Your member portal or the number on your card will tell you, and your plan must also write to you between June 30 and July 31 each year listing the supplemental benefits you have not used in the first half of the year.
Bottom Line
The over-the-counter allowance is a genuine perk that is being scaled back. Among ordinary plans it fell from two thirds offering it in 2026 to 58% in 2027, the insurer with the most plans on sale, Humana, cut it sharply, and the typical card is worth about $200 a year, loaded in quarterly slices that almost never roll over. Special needs plans are the exception, with allowances several times larger. Regulation is moving the same way as the market, with CMS requiring evidence behind the chronically-ill benefits and banning the categories that made some flex cards look like general-purpose money.
If your plan has one, use it, and read the letter that arrives in July. If you are choosing a plan, price it last. To see which plans in your ZIP code include the benefit, use the official Medicare Plan Finder (our step-by-step guide explains its filters), or call your State Health Insurance Assistance Program for free help.
Sources
- PBP Benefits – 2027 and PBP Benefits – 2026 — Centers for Medicare & Medicaid Services. The benefit filings every plan submits. Source for every plan count, share and allowance amount for 2026 and 2027 in this article (our own count): the 2,071 of 3,553 ordinary plans with an allowance in 2027, the special needs plan shares, the annual amounts, the refresh periods, roll-over, delivery method, naloxone and nicotine replacement, and the insurer table. Our results are available as a downloadable spreadsheet (CSV).
- Medicare Advantage 2026 Spotlight: A First Look at Plan Premiums and Benefits — KFF. Source for the 2026 and 2025 benefit shares in the first table: the 66% and 73% over-the-counter figures, the 94% figure for special needs plans, the meal, transportation, food and produce shares, and the dental, vision and hearing shares.
- Contract Year 2025 Medicare Advantage and Part D Final Rule (CMS-4205-F) — Centers for Medicare & Medicaid Services. Source for the Mid-Year Enrollee Notification of Unused Supplemental Benefits, including what it must contain and the June 30 to July 31 window, and for the requirement that plans evidence SSBCI benefits with research and maintain bibliographies.
- Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program (CMS-4208-F) — Centers for Medicare & Medicaid Services. Source for the codified list of items that may not be offered as SSBCI, including non-healthy food, alcohol, tobacco and life insurance.
KFF and CMS rule figures were checked against the sources above on September 20, 2026. The 2026 and 2027 plan counts and allowance amounts are our own, from the two CMS PBP Benefits files, counted the same way on October 17, 2026. Annual amounts are the filed maximum multiplied by the number of periods in a year.
Disclaimer: Benefit availability and allowance amounts vary substantially by plan, carrier and county, and change from year to year. Always confirm current details directly with Medicare.gov, 1-800-MEDICARE, or your own plan’s Evidence of Coverage before relying on this benefit.
Unai Sampedro founded and edits Medicare Plan Compass. He is not a licensed insurance agent or broker and takes no commission from any insurer; the site is funded by advertising. Articles are written from CMS and Medicare.gov documents and reviewed each year when new figures are published. Nothing here is personalized advice: the goal is to explain the rules in plain language so readers can ask better questions before they speak to someone who can advise them.